Office values, which have fallen by about a third since last summer, are expected to continue their downward spiral until at least the middle of the year. Assistant director of the commercial department at Vigers Ryan Jones said while it might seem like a good time to move office to take advantage of cheap prices and leases, it could pay to wait for six months. Agents say they are counselling clients to hold off from changing leases or buying new premises until a bottom level for office prices emerges. Mr Jones said: 'I think we are just starting the downturn.' David Faulkner, head of research at Brooke Hillier Parker, said: 'I don't think the market's downward trend is going to slow until we get near the third quarter of this year.' Mr Jones said it was a combination of the worsening economic environment and expectations of office oversupply - especially in secondary office centres like Kwun Tong - which were dealing a crippling blow to office property values and leases. 'We are going to have at least a 15 to 20 per cent drop in prices within the next six months before we even start seeing the bottom,' he said. In office leases, Mr Faulkner expects rents to fall by up to 10 per cent by mid-year. 'It depends on location, but generally the market is going to be affected by a significant new supply on the fringes of Central and in secondary locations in late 1998 and 1999 . . . rents are expected to soften further as a result,' Mr Faulkner said. Mr Jones said landlords soon would be offering large incentives for companies to renew leases in present premises rather than moving to new sites. 'In the strata-title buildings, there's going to be a lot of competition for tenants within one building even,' Mr Jones said. Andy Keung Shu-wing, managing director of Hong Kong Property Services - the agency arm of Cheung Kong (Holdings) - said few clients were thinking of moving office in the present climate. 'Even though leases and prices have fallen by a lot, moving office entails a big disruption of your operations and it also costs a lot to move furniture and change your letterheads and all those accompanying costs,' he said. In November, Standard Chartered Bank bought a 300,000-square-foot office development for its own use in Kwun Tong for $1.3 billion, about 10 per cent lower than similar space in the area. Since then prices have fallen by at least another 10 per cent. 'Standard Chartered is going to regret that investment decision six months down the road,' Mr Jones said. A more prudent investment decision for Standard Chartered - and more profitable in the short term - would have been to hold off the purchase until the market began to show signs of improvement, Mr Jones said. Mr Faulkner said Hong Kong was still the most expensive office location in Asia, with average prime rents of $70 per sq ft per month. By contrast, office rents in Tokyo and Singapore were only $45 and $42 per sq ft per month respectively.